Reliance Capital Pares Debt By Rs 2,480 Cr Through Three OFS Issues

Reliance Capital (RCL), promoting company of Reliance Nippon Life Asset Management (RNAM) successfully sold 6.31 per cent stake in its asset management arm RNAM through offer for sale (OFS) route. This offer, opened on Monday last, received Institutional and Retail participation for over 260 per cent of the base offer size. This is the third OFS, through which RCL has sold total 17.06 per cent stake in RNAM. Through these three OFSs, the RCL has garnered Rs 2,480 crore.

The entire RNAM stake monetization proceeds of ~ Rs. 6,000 crore (~ US $ 860 million) to be received through RNAM stake sale by Offer for Sale and transaction with Nippon Life Insurance Company of Japan will be utilised to reduce Reliance Capital’s outstanding debt, a release issue by RCL said. 

According to market sources, RCL total outstanding debt is estimated at Rs 18,000 crore. Approximately 33 per cent of debt (around Rs 6,000 crore) will be reduced from the proceeds received through OFS and transaction undertaken with Japan’s Nippon Life Insurance.  

RCL has several other businesses like Reliance Securities, wealth management, NBFC, Housing finance and Insurance business. It intends to raise approximately another Rs 6,000 crore through selling one or more of its businesses, thus scaling down its outstanding debt by Rs 12,000 crore (70 per cent), sources cited above added. JM Financial acted as Selling Brokers for the OFS. 

After touching a 52 week high of Rs 289, the RNAM stock reacted to stake sale and slide down from the peak on the day the latest OFS began. It closed unchanged at Rs 261.90 on Friday. The company hit the IPO market through a book built issue in October 2017 and issued shares in the price band of Rs 247-252 per share. The company stock had hit its 52 week low at Rs 127.20 on October 5, 2018.